Over the first three months of 2019, National Bank of Kenya (NBK) posted a profit of Ksh106 million.
Year on year, the lender’s profit has risen by 138% from the Ksh278 million loss registered in Q1 of 2018.
NBK’s financial results for the three month period ending March 31 were drive by increase in customer deposits, which increased to Ksh89 billion compared to Ksh86 billion during the same period last year.
Net loans and advances reduced to Ksh45 billion as against Ksh51 billion on reduced volumes of new loans issued and collections made on existing loans.
The bank’s operating income for the period was Ksh2.2 billion, a 26% increase from Ksh1.7 billion recorded in the same period the previous year. NBK said that this was mainly due to improved funding mix, recoveries from the non-performing loans (NPL) book and interest earning assets.
“This is in line with our strategy of improving our net interest margin by lowering the cost of funding and accelerating recoveries and remediation of the NPL book,” said NBK Managing Director and chief executive Wilfred Musau.
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Operating expenses reduced marginally by 3% year on year to Ksh1.7 billion from Ksh1.7 billion.
NBK’s financial results for the period ending March 31 comes at a time when the lender is engaged in a proposed acquisition offer from Kenya Commercial Bank (KCB) in a share swap deal.
The proposed merger has already received approval from regulator Capital Markets Authority as well as getting the greenlight from KCB shareholders.
All that remains is approval from the Competition Authority of Kenya (CAK) and for NBK shareholders to agree to the share swap.
NBK shareholders meet for an annual general meeting on June 14, where they will also discuss raising the share capital of the lender to Ksh13 billion.
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